August, 15, 2022 - Mondi plc ("Mondi" or the "Group") today announces that it has entered into an agreement to sell its most significant facility in Russia, Joint Stock Company Mondi Syktyvkar, together with two affiliated entities (together "Syktyvkar" or the "Business") to Augment Investments Limited ("Augment") for a consideration of RUB 95 billion (around EUR 1.5 billion at current exchange rate)1, payable in cash on completion (the "Disposal").
The Disposal is conditional on the approval of the Russian Federation's Government Sub Commission for the Control of Foreign Investments and customary antitrust approvals. The Disposal is also subject to the approval of Mondi's shareholders at a General Meeting.
The Syktyvkar assets to be transferred to Augment as part of the proposed Disposal exclude a cash balance of RUB 16 billion (around EUR 255 million at current exchange rate). The cash balance is planned to be distributed by form of dividend to Mondi before completion.
Remittance of this dividend requires the approval of the Ministry of Finance of the Russian Federation. The net proceeds from the Disposal and the RUB 16 billion dividend will be distributed to Mondi's shareholders as soon as reasonably practicable following receipt.
The proposed Disposal follows Mondi's announcement on 4 May 2022 that, having assessed all options for the Group's interests in Russia, it had decided to divest its Russian assets.
Accordingly, Mondi launched a competitive auction process to find a suitable new owner for Syktyvkar.
Syktyvkar is a wholly owned integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar (Komi Republic). The Business employs approximately 4,500 people and it is a leading provider of uncoated fine paper and containerboard to the domestic Russian market.
For the year ended 31 December 2021, Syktyvkar reported revenues of EUR 821 million, EBITDA of EUR 334 million and profit before tax of EUR 271 million. For the six months ended 30 June 2022, Syktyvkar reported EBITDA of EUR 225 million and as of 30 June 2022, the gross assets of the Business were EUR 1,590 million while its net asset value was EUR 1,203 million. Mondi operates three converting plants in Russia, which are much smaller in size, not affiliated with Syktyvkar and not part of the Disposal. An update will be provided on the divestment of these plants in due course.
Augment is an investment vehicle majority owned by Viktor Kharitonin, comprising assets in the pharmaceutical and other sectors across Russia, Europe and the United Kingdom.
The Disposal is expected to complete in the second half of 2022. However, the divestment process for these significant assets is operationally and structurally complex and is being undertaken in an evolving political and regulatory environment. Therefore, there can be no certainty as to when the proposed Disposal will be completed.
Further information regarding conditions of the disposal as set out above, the Disposal is subject to the approval of the Russian Federation's Government Sub-Commission for the Control of Foreign Investments as well as customary antitrust approvals.
1 Converted at FX rate of 61.7 RUB/EUR.
Mondi is a global leader in packaging and paper, offering innovative and sustainable packaging and paper solutions. The company is fully integrated across the packaging and paper value chain. To learn more, visit: www.mondigroup.com.
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